By James Beale
Running an independent bookstore in Kensington is like tending a library of living stories. Every day, I see families discovering new favorites, students hunting for sources, and professionals unwinding after work. But keeping the lights on takes more than hard work and passion—it requires weathering the fine print of today’s economy.
One of the biggest hurdles for my business has been shouldering the cost of skyrocketing credit card interchange fees — also known as “swipe fees.” As Maryland’s elected leaders at both the state and federal levels explore ways to keep small businesses thriving, free-market credit card reform is one avenue that would carry some serious weight.
You see, each time a customer pays with a credit card at my store — whether by swiping, tapping or inserting — two to four percent of that transaction is siphoned off by the credit card network and issuing bank. What does that translate to in real-world costs? Last year, small business owners across the U.S. were hit with a staggering $148 billion “swipe fee” bill. Maryland entrepreneurs know this pain firsthand. In 2023, businesses in the state lost an estimated $156 million to credit card “swipe fees” on sales tax alone. When you factor in the other costs at the register — think an item’s sticker price or gratuities — the burden is far higher.
Because of this dynamic, credit card processing fees are often Main Street’s second highest operating cost behind labor.
For my bookstore, that money could be used to host author talks or expand our selection. And we can’t raise prices on our customers since the list price of every book is set by the publisher and printed right on the cover. That means “swipe fees” cut directly into our ability to survive, let alone grow.
To make matters worse, Visa and Mastercard control more than 80 percent of the credit card market, leaving small businesses with virtually no leverage and customers with no real alternatives. Some states—Illinois among them—have started pushing back by blocking swipe fees on non-revenue portions of transactions. Our state lawmakers introduced a similar, bipartisan measure at the start of the year.
But piecemeal fixes aren’t enough. If small businesses in Maryland and across the country are going to keep serving their communities, we need a solution at the federal level.
That’s where the Credit Card Competition Act comes in. The bipartisan legislation would require banks with over $100 billion in assets to include a second processing network beyond Visa and Mastercard on the credit cards they issue. By injecting free-market competition into the credit card arena, smaller networks could offer merchants lower rates, compelling “swipe fees” to come down altogether.
The bill has no shortage of support, with leaders from both sides like Vice President J.D. Vance and Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS) backing it. Four-fifths of small business owners, according to polling from the Job Creators Network Foundation, also support the reform. It’s not hard to see why.
It’s estimated the Credit Card Competition Act would save merchants across the U.S. $16 billion if etched into law—$307 million of which would be reserved for Maryland’s entrepreneurs.
Bookstores like mine are part of Maryland’s cultural and economic backbone. But we can’t serve our communities to the best of our abilities if we’re constantly being threatened by credit card giants like Visa and Mastercard. It’s time for our state’s elected leaders to give us a fairer environment to operate in and pass meaningful credit card reform.
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